Amazon is building its own ad tech for OTT

Jeff
Bezos, chief executive officer of Amazon, arrives for the third
day of the annual Allen & Company Sun Valley Conference, July
13, 2017 in Sun Valley, Idaho.
Drew
Angerer/Getty Images

• Amazon has discussed building its own video ad serving
  product.
• In meetings with top TV and video companies, Amazon has
  brought up the ideal of potentially building and licensing this
  product
• This could pit Amazon in direct competition with Comcast and
  Google.

Amazon’s mission to
conquer advertising may have a new front — video ad tech.

And in this case, instead of challenging the Google/Facebook
digital ad duopoly, Amazon would be looking to insert itself into
a
battle between Comcast and Google.

Specifically, Amazon has discussed building a proprietary video
ad serving product for its own streaming business —and eventually
licensing it, according to media executives familiar with the
matter. Such a product would be similar to Comcast’s
Freewheel or Google’s DoubleClick tools, the people said.

It’s unclear how far along Amazon is in the process of developing
this ad serving product. The company is not directly taking
meetings to pitch its own ad server, one person said. Instead,
the potential product has come up during discussions Amazon is
having with media companies about its
emerging programmatic ad business via Fire TV devices.

Video ad serving software helps big media companies make sure
that the right ads run at the right time and keeps competitor’s
ads away from each other,so Coke ads don’t run right next to
Pepsi, for instance.

Freewheel, which Comcast acquired in 2014, has been the category
leader for a while. But more recently,
Google has made an aggressive play with its own alternative.

The stakes are high. While getting big media companies to use
their ad tech over a competitors doesn’t necessarily provide
Comcast or Google’s a lock on ad budgets, it does enable these
companies to get their hooks deeper into media partners.

Amazon

Tech and telecom giants want to get in bed with all the key media
players

Playing such a central role in delivering a media companies’
advertising infrastructure provides a Google or Comcast with
loads of data on viewership and ad patterns. Plus, the more
successful a company like Google is at helping a giant like CBS
manage its video ads business, the more opportunities to deepen
such a partnership. Or so the thinking goes.

In Amazon’s case, the
company is now a solid number 3 when it comes to pure digital
advertising. And with the growth in popularity of its Amazon
Fire TV device, it’s rapidly growing its footprint in OTT
advertising.

Amazon has historically built its own ad tech, first to serve its
own ad business before eventually licensing it to partners. But
when it comes to video ad serving, Amazon currently employs third
parties when streaming events such as
The Laver Cup or select
Premier League Soccer events.

While media companies may view working Amazon warily (as they
already do Comcast and Google), Amazon could have two clear
advantages in this sector, if it were to go ahead and build and
license an ad serving product. 

For one, it could build its video ad server tech from scratch,
for the needs of the connected TV world (products like Google’s
DoubleClick, for instance, were born in a display, desktop ad
era).

Plus, Amazon has a massive pool of data on its customers,
including where they live and what they like to buy. It’s
conceivable that this data could be used to bolster the
effectiveness of its video ad tech, helping media companies
better track the effectiveness of ad campaigns.